Democratization and Disintermediation: Disruptive Technologies and the Future of Making Things: Democratization and Disintermediation Have Already Reshaped Major Industries; Now They're Changing Manufacturing

Democratization and Disintermediation: Disruptive Technologies and the Future of Making Things: Democratization and Disintermediation Have Already Reshaped Major Industries; Now They're Changing Manufacturing

Article excerpt

We live in a world of constant change, where new technologies are dramatically reshaping how we work and live. The most significant of these changes occur when new technologies unleash two powerful forces on an industry--democratization and disintermediation. The power of these two forces is fueled by the fundamental human desire to communicate, connect, create, and consume in a personalized manner. We have seen time and again how new technologies emerge without warning and gain momentum rapidly by empowering people as creators and consumers. Already the waves of democratization and disintermediation have transformed major industries--first computing, then publishing and retail--leaving behind permanently changed landscapes. And now we are seeing early signs of democratization and disintermediation changing the value chain for how we make things.

Software Eats the World

In 2011, venture capitalist Mark Andreessen declared that "software is eating the world." Andreessen was in a position to know--he helped create Mosaic, the first browser technology on the World Wide Web, and later cofounded Netscape.

Andreessen's comment continues to be timely because it describes a repeated phenomenon. Software has radically changed technologies, industries, and the business models associated with them. There is a pattern in how software repeatedly devours markets, and that pattern can inform how we look at the future of making things.

It's useful then to go back and look more closely at the historical pattern. Let's begin with computing. PARC developed the Alto personal workstation, the first personal computer (PC) with a graphical user interface, which famously inspired Steve Jobs to create the Macintosh after he saw it during a visit to PARC that was arranged in return for Xerox buying a large stake in Apple.

But that was just one point in a long process of democratizing computing that began with companies like DEC, Data General, and Wang moving minicomputers out of the hands of the IT department and giving them to engineers and financial analysts. These companies gave nonexperts direct access to computers. PCs were the next giant step in the mass computing process, putting computers in the hands of everyone. This revolution wasn't just about creating computing hardware at a lower cost; it was driven by software--easy-to-use applications that allowed everyday people to access the power of computers for word processing, spreadsheets, and desktop publishing. Software ate minicomputing and enabled personal computing. It democratized access to computing and allowed everyday people to create, communicate, connect, and consume in very personal ways.

The next industry to be eaten by software was publishing. The big newspapers--The New York Times, The Wall Street Journal--originally felt their role was to select a small number of experts to report the news and provide "important" opinions to consumers of the news. But then blogging emerged, allowing everyday people to share their opinions broadly. The big, centralized organizations that controlled the means of access--the printing presses and the distribution networks--said, "No, people really don't want that. That's crazy." But people actually do want it. Many want to publish their opinions and many want to hear from a variety of voices. WordPress.com, a popular blog-hosting site, grew to 4 billion page views a month in five years.

This type of radical change creates enormous challenges and big opportunities. As the shift in publishing has shown us, one of the most challenging elements of disruptive innovation is the change in how value is delivered and consumed, often leading to the creation of new services and business models that weren't available or even possible before. This can be the hardest kind of change for an industrial organization. It can be hard for a big industrial organization to even see it coming. Look at DEC, for instance. …